Online Reporter
THERE have been a lot of major changes in the retail markets, backed by changes in the productive sectors over the last few years.
Firstly, goods and commodities have become readily available at stable prices in whatever currency the buyer wishes to use.
This is a direct result of actions taken by Government and the Reserve Bank of Zimbabwe through creating the necessary economic conditions, which include ever growing exports so that foreign currency no longer becomes the limiting factor, and ensuring that the ZiG would give Zimbabwe its first fully accepted local currency for a long time.
There had to be quite a lot of more temporary regulation to bring the business world online, but some of the most critical parts of that batch of regulations, such as the insistence that shops use the official exchange rates, were dropped as no longer necessary, ordinary market forces being considered totally adequate.
That followed the switchover in the foreign exchange markets, where the Government and RBZ stopped allocating directly or indirectly foreign exchange and instead left this to market forces inside the banking system.
There are still rules over exports of capital, but these exist in many other jurisdictions. Ordinary trading is now very lightly regulated, if at all.
Cabinet keeps close tabs on the markets, since Government needs to know what is happening without any filtering by those wishing to exaggerate either the good or bad news.
What turned up in the last report on the 14 most necessary and basic grocery commodities, things everyone has to buy, for the four months from April to August this year was overwhelmingly good news.
Everything was always in stock, at least almost all the time with just the latest delivery run from the supplier being the only minor delay. Prices are very largely constant, in both currencies. The retail sectors have largely welcomed these moves, and the fact that market forces have stabilised prices, giving business far more predictability.
The formal sectors, after complaining for some time about losing business to the informal sector, are now flourishing and picking up the customers they had lost, largely because they have the stocks, the premises, and all the rest of the formal advantages, plus the presence in a community which makes bad business so difficult.
The market forces are able to operate because there are no shortages. It is impossible for anyone to corner a market and then charge what they like for something that is essential, or charge scarcity prices.
Generally, when retailers set prices they have all returned to the days when their prices included a mark-up on what was charged by the producer or importer, which just happens now to be good business. The Government does not have to intervene.
Cabinet, quite correctly, saw these changes as the best way forward to encourage growth and meet the economic target it has been setting as it moves decisively forward to have that upper-middle income economy by 2030.
Being backed by a growing formal sector obviously helps as the goals come into alignment.
Local industrialists are also operating within this stable system that eschews shortages and are able to do rather well as they offer Zimbabweans a bit extra, usually a lower price because transport charges are much lower and even the modest customs duty sometimes charged is more of a revenue raiser than protection.
By ensuring that they do compete by offering quality work at reasonable prices, they are building up the sort of experience and reputation they will need for the day when they will be competing in continental markets as the African Continental Free Trade Area comes into force.
Local manufacturers are already operating within a competitive environment and doing well out of it, and no longer seeking protective tariffs or the like, since those would simply impact adversely what they hope will be a growing export business when others retaliate.
In fact, for the first time in around 60 years, Zimbabwean businesses are flourishing in a very lightly regulated environment, one where innovation, competitiveness and other factors make the difference, not having regulations tailored to suit certain producers and manufacturers.
If you are good you will make money and if you’re the best you will probably make more than most.
This has been a revolution within the Zimbabwean private sector, where we have become accustomed to working within market forces rather than trying to twist them or gain advantages through other regulatory means.
The present determined attempts by Government to cut back on regulation and combine those we have to keep, for safety or other well-accepted reasons, will accelerate this revolution towards an ever more normal economy.
It has already seen some of the highest annual growth rates in Zimbabwean history with more to come.
